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Hmm, I know where the MS lawyers found them too. They stole the following:
"Jamie Cansdale released a free addin to Visual Studio back in 2004 to help developers build unit tests. His only problem was, he enabled his addin for all versions of VS - including the Express addition which isn't supposed to support addins. After over a year of trying to talk with Microsoft and understand how and why he was in violation of their license agreement, during which they would never explain specifically which clause in the license was being violated, they sent the lawyers after him and pulled his MVP status. To top it all off, Jamie is actually a Java developer by day, his addin was originally developed just as a hobby project. A full account is available on his blog, including all email correspondence he had with Microsoft and the now 3 letters received from Microsoft lawyers. The lead product manager for Visual Studio Express has responded to Jamie's posts."

Really? I'm going to have to go over my Windows EULA again. Does it contain that phrase? In which case it is clearly against the EULA to install ANY additional software beyond the basic operating system, clearly doing so would be working round technical limitations.

As to being open, that was to counter the "but TFS is for VS only" argument

You said:

"Subversion doesn't have all the features they need, that's the problem. For one thing, TFS is open"

I simply countered that point, which is clearly incorrect, as Subversion is as open, if not moreso. If you have other reasons, great, but you should have used them to support the argument in your original post.